Recently, I noticed an interesting turning point in the trend of the RMB exchange rate. After experiencing three consecutive years of depreciation from 2022 to 2024, the RMB seems to have found a new rhythm. In November last year, the USD to RMB exchange rate rose below 7.08, even touching 7.0765, hitting a nearly one-year high, which many people are discussing.

Looking back at the performance throughout 2025, the first half was indeed quite tough, with global tariff policy uncertainties, a strengthening US dollar index, and offshore RMB once breaking above 7.40. But in the second half, as US-China trade negotiations steadily advanced, the dollar index began to weaken, and the RMB gradually stabilized and rebounded. This inverse fluctuation with the dollar actually reflects changes in market sentiment.

The current question is: can this round of appreciation continue? Many international investment banks are optimistic about the future trend. Deutsche Bank believes the RMB may enter a long-term appreciation cycle, estimating it could reach 7.0 by the end of this year and further appreciate to 6.7 by the end of next year. Morgan Stanley’s outlook is similar, predicting the dollar index will fall back to 89 by next year, with the RMB exchange rate possibly reaching around 7.05. Goldman Sachs is more aggressive, directly raising its 12-month forecast from 7.35 to 7.0, citing that the real effective exchange rate of the RMB is undervalued by 12%, and the dollar is undervalued even more, by 15%.

But to truly judge the RMB exchange rate trend, several core variables need to be considered. First is the US dollar index, which fell 9% in recent months, marking the worst start in history, providing some support for the RMB. Second is US-China relations; although recent negotiations have made progress, their sustainability remains uncertain, and this is always a key factor affecting the exchange rate. Third is Federal Reserve policies—if rate cuts accelerate, a weaker dollar would benefit the RMB; if inflation remains high, the Fed might slow down rate cuts, keeping the dollar strong. Lastly, the attitude of the central bank matters; the People’s Bank’s monetary policy orientation has a significant short-term impact on the exchange rate.

From a medium- to long-term perspective, several supporting factors still exist. China’s export resilience provides fundamental support for the RMB; the trend of foreign capital reallocating into RMB assets is gradually establishing; and the structural weakness of the dollar index may continue. Taken together, these factors suggest that the overall direction of RMB appreciation might indeed be set.

For investors, judging the RMB exchange rate trend mainly involves monitoring these dimensions: the monetary policy stance of the central bank, domestic economic data, the dollar’s movement, and official guidance on the exchange rate. All of these are transparent and publicly available data. The foreign exchange market is highly liquid, and the dual-way trading feature offers ordinary investors a relatively fair chance to participate. Of course, leverage trading can amplify gains but also risks, so it’s important to set appropriate risk controls based on individual circumstances.

Overall, the RMB exchange rate may be at a turning point in its cycle; the depreciation cycle that began in 2022 might have ended. If the aforementioned positive factors continue to ferment, the RMB could enter a new phase of medium- to long-term appreciation. For investors interested in the RMB exchange rate trend, now is indeed a time worth paying attention to.